The median age of owner-occupied homes is 37 years, according to the latest data from the 2016 American Community Survey. Compared to a median age of 31 years in 2005, the U.S. owner-occupied housing stock is aging gradually. This aging trend is primarily because of modest gains in residential construction over the past decade.
This aging housing stock signals a growing remodeling market, as old structures normally need to add new amenities, or repair/replace old components. Rising home prices also encourage home owners to spend more on home improvement. Moreover, the number of owner households has been rising since the third quarter of 2016. This indicates a strong rising demand for new construction over the long run, as current owner-occupied housing stock is older.
New constructions added nearly 3 million units to the national stock from 2010 to 2016, accounting for only 4% of owner-occupied housing stock in 2016. Owner-occupied homes constructed between 2000 and 2009 make up 16% of the housing stock. But more than half of the owner-occupied homes were built before 1980, with around 38% built before 1970. Due to modest gains of housing construction, the share of new construction built within past 6 years declined greatly, from 11% in 2006 to only 4% in 2016. Meanwhile, the share of housing stock built 46 year ago or earlier increased significantly from 31% in 2006 to 38% in 2016.
It is worthwhile to take a look at the households living in different ages of housing stock. Newly homes are more likely being owned by younger generations. Around 70% of homes built after 2010 are owned by Generation X (age 35 – 54) and Millennials (age 18 -34), with 26% occupied by the 35-44 age group, 19% by the 45-54, and 25% by under 35. Meanwhile, homes built before 1980 are largely owned by Baby Boomers (age 55 or older). Especially 59% of homes built 1970 to 1979 and 56% of homes built before 1969 are occupied by householder ages 55 or older. It implies a growing market for renovations allowing older homeowners to age in place.
Great look into why redevelopment is trending. The older housing stock, as it sits, is not meeting buyer’s demands. So, buyers are buying “fixers” or just starting over with new construction. Based on your numbers, there is a long way to go as housing stock transitions to modern day.